Seeker

I think they've already begun to taper, they just haven't announced it. There was no option to vote that, so I went for yes, 10 billion.

One other thing I noticed from another forum that adds to the usefulness of forums. I noticed that a thread with very active posters, even though they were posting crap, managed to draw in a lot of other posters. The perceived activity dragged in the herd. They couldn't help themselves.

If you accept that trading can't really be taught or handed over to someone via posts or words, and that the main features of successful trading have been disseminated over time by the market wizards and others. Then all that is left is for one to spend time on it themselves, develop their own understanding and carve out their own niche. If they already have carved it, then all that is left is to repeat truths that are known for a 100 years to the new generation, discuss any differences in the current cycle and shoot the breeze with others. Trading forums provide an option for this for both the newcomer and the experienced. So they provide an option for the successful to get rid of some of their boredom and feel like they are giving back, and for the newbies to get rid of some of their frustration at losing, and find comfort in the herd. That is why they work, in an industry where you would think a trading forum can't possibly work because it is all competitive and everybody's interest should be in others losing. Amazingly there are a few who do want to help. Is it down to some underlying guilt at knowing that they are taking the money of others on a daily or weekly basis? In these ways, trading forums all offer something 'useful'. Maybe not so useful in developing an edge, but useful for the psyche. Unfortunately, as with nature, parasites develop, who see the whole thing as prey of which they can suck blood from. They may be your common garden vendor or may be even the site owners and admin. These become an irritant to the other species, but if nature finds mosquitos and leeches necessary, then they must be needed in the system somehow. Perhaps someone can enlighten us as to why they are necessary. The worst site for this parasitic infestation seems to be Forex Factory (and I don't think that's the one you are referring to as the zoo). Jacko was vouched for by all the gurus over there. James16 vouched for him too, and is also vouched for by dozens of others there, but he probably can't trade either, and was outed by one of his own members (although the cover-up was quick). There are at least half a dozen off shoots of James16 and I'm sure the list could go on. Merlin seemed to disappear prior to all the scandal. Seems like these people are working together. From what I've seen, there are lots of gurus and vendors with cherry picked charts on all of these sites. Very few have held up to my own testing - that is testing whether what they say is true and whether they can speak clearly rather than talk in generalities. DBPhoenix was one of those from here that did stand up to testing. There are two or three other posters here that also have stood up to testing. Here is something for the new trader: If you can't find an edge, don't worry too much, unleveraged buy and hold for indices or a basket of well chosen stocks is profitable if you can afford to wait. Add a bit of timing to it, and you've got something good. Of course there are better ways to trade, but if one is stuck in the myth that nothing works, and hasn't found anything good yet, well there you go.

For leisure, I'm reading the Game of Thrones series. For trading, I'm reading the Art of War - Sun Tzu (Sunzi)

Depends. Now, if you have 20 strategies which work, then you can compare expectancy and variance, and then you may decide it's not worth trading the 2 point a day ES strategy as you have better. However, if you have no strategies which work, except this 2 point a day strat, then that's all you got that's profitable. So yes I would trade it in those circumstances while I looked for something better, or developed the strat further. So perhaps I misread renvik's post, seemed to me he was saying he just had loads of strategies which didn't work and this one strategy which did but he didn't consider good enough and nothing else. So apologies if I read your post wrong renvik, and hope you're trading an even better strategy. I think I've just been reading too many false claims over the years, with people talking about 70% win rates and winners twice as large as losers, or 80% winners and 1:1 risk reward etc (read both only the other day). A 2 point a day edge on the ES seems a lot in my opinion. In my experience a lot of edges (mechanical ones at least) are small and a lot closer to the 50% for a 1:1 risk reward or closer to 33% for a 1:2 risk reward than most people seem willing to admit on public forums.

No, my guess is not wrong. Anyone who can develop a strategy that makes 2 points a day net average on ES, knows that is more than enough and would appreiate it and trade it and not look for other things. One can easily get filled 100 contracts on the ES, which corresponds to $5000 per point, which for a 2 point a day strategy corresponds to $10,000 a day or $50,000 a week average. And yet here we have you saying you're not interested in $50,000 a week salary and you'll look for something else. What a load of nonsense. You DON'T have a strategy that makes 2 points a day on the ES. What you perhaps have is some curve fit strategy that doesn't work and loses money per day on average.

2 ES points per day is plenty. If you have something like that, then you should trade it. I would guess that you don't have a strategy that returns 2 ES points a day, otherwise you would be trading it and making a lot of money.

There are quite a few metrics of interest, I just suggested a simplistic one, tha captures a lot for comparing two systems. You could look into Sharpe ratio, drawdown etc. It is obviously necessary to forward test the strategy.

I would go with expectancy multiplied by average number of trades per day.

Waste of time. I won't bother in future

2% probably seems conservative if you're in this as a get rich quick scheme or have gambling mentality. You mention a 30 point loss, which would be 1500. Can you imagine a casino, which has an edge in all their games, risking 30% of their entire capital on one bet? That casino would soon go out of business. What about a hedge fund or a bank? So you have to decide if you want to run your trading as a business, and slowly accumulate wealth, or if you want to gamble and have some ups and downs before you lose the lot. $5000 is not HUGE capital. If you don't have the capital, you shouldn't trade. Work and build up your stake and learn on demo so that when you do have a stake you can earn with it.

Steve from what I remember, Hoffman started with a one lot, and ended up averaging down to a loss of over 300k in a day. This among other things demonstrated that Hoffman is clearly a failed trader, and yet he's still going as a vendor, charging naive folks for poor trade calls. Shameless isn't it? Why do they still sign up? Mystery to me. There's better information here - and better traders - for free. My opinion is that both Hubert Senters and John Carter can't trade either, but I'm sure they make good money from the punters. Repackaged a bunch of indicators and sell them along with a fancy name, a few videos and a service and they've got a business.

As I see it, any vanilla option position, long/short some calls/puts is conceptually equivalent to a position in the underlying asset. Non-vanilla options are a separate issue. This is clear since, the entire point of delta hedging is to eliminate the risk of changes in the value of the option by investing in the underlying to make yourself delta-neutral. The fact that banks can (and do) do this indicates the equivalence. The reason I point out the equivalence, is because some may think you are getting something different, or new, that couldn't be achieved by investing in the underlying. Typically (though not always) you will be creating a position that you could equally do for less transaction costs, by just investing in the underlying (i.e. no options needed at all). It's often a little bit like going long and short the same instrument and paying twice the spread you need to. That said, options have their own market, and markets can get out of line. But you should be aware that you could create (funds permitting) the same position via the underlying, and so there really is no reason to get into vanilla options unless for cost reasons, because the market is out of line, or because you don't have the funds to achieve the respective position in the underlying. The last of these is probably not a valid reason either, but I state it anyway, the second will be capitalised on by algos before you can, and the first is unlikely since trading options is usually quite expensive, and more so than trading the underlying. I look forward to other traders pointing out why one would wish to trade options rather than take an equivalent position in the underlying.

My biggest loss was time. Time spent looking at the wrong things, time spent trading without a plan or without real understanding of what was important, time wasted on indicators, etc. then time unlearning all the nonsense I had picked up. The money comes back with interest, but you can't ever get that time back.

Where is the entry? The close of the bar the arrow points to? The open of that bar?

Thanks Humbled. So you are making money. You doubt the strategy, the entry, no confidence in it etc. Yet you're profitable. And that despite not having much experience with the method, and still working on the rules and your understanding. My suggestion is, give it time. Keep thinking about how to improve. Be patient and work hard. Dont' expect every trade or every day or even every week to be a winner. Don't start looking for secret sauce, or changing the basics principles of what you have been given by Thales. Understand that the secret sauce is experience, and it can't be rushed. But that it can be slowed down by looking at the wrong things and approaching it in the wrong way. You have been given the right approach. Also if I may, stop putting problems for yourself where there aren't any. You worry about the entry, but the entry is usually fine. You worry about the method, but you're profitable and only just started trading this way! You worry about risk reward but I think I saw a +16 point winner in this journal, and your biggest loss was about 4 or 5 points.

humbled, what were the overall trading stats for this thread? P&L, win%, average win, average loss...I have the impression that the results are not that bad

Not true at all! He could go the bar or the strip club. burning is such a waste

All of the answers below deserve more detail, but you've asked a lot of questions. 1. If you have a lot of time, study economics and get some good books on that. If you don't have the time go to wikipedia, and use the referenced articles 3. I use ninjatrader, and my broker's data to populate the charts, and I also have another set of charts from another broker. There are lots of good charting programs, but google finance is not one. 4. Get some good charts. 5. There are no cheat sheets in this business except for: don't fight the trend, cut your losses, run your winners. 6. Get a broker. Many have free trials and demo accounts. 7. Yes you have currency exposure. It depends on how you're trading. If you're going to trade some stocks and close out your position same day, your currency exposure is not that great. If you're looking into being a long term trader, then you can look into ways to hedge off this risk. There's always risk though. 9. Forex Factory has a nice calendar for economic announcements. If you're trading futures, there are several futures calendars looking at expiry dates etc - go the exchange's site. 10. How options are handled on expiry depends on who your broker is and what your intention is. If you are a beginner, stay away from options until you have a much deeper understanding of them. Good luck on your target of 100% every 6 months. You may wish to do more research into successful traders and their returns and money management.

Humbled, I think you have done well, and said so. I am posing questions because it seemed like you were giving up on the approach already. Jumping from one thing to another because of short term poor performance is one of the things that makes trading well take so long.

Just some questions for you to think about, and you don't need to answer. You previously posted that you believed you needed to become consistent. How do you expect to trade consistently if you are not consistent in your method? I observe you are switching between 1 minute and 2 minute bar intervals, and one trade you have stops in a defined place but then another trade you are moving them/exiting because you have no belief in the system, and now you're almost ready to throw the idea away because you don't believe it's working for you (at least not on 1 minute bar interval)? Is this number of trades really enough to convince you that it's not working? Especially given that you're only learning it...haven't really sorted out your exits...and are breaking the rules. Is changing approach every time you hit a rough patch the route to consistency?

You could go back to a 1920's chart of the DOW and say buy and hold is pretty effective too.

I think Thales is doing an excellent job guiding you, so I won't interfere in that. But it is worth saying that you're doing well, and you should be encouraged. Very nice journal.

That would be breaking buffett's rule 1 though wouldn't it

I understand where you're coming from, but I'm more than a little wary of the government having any more power than it already does, or attempting to 'protect us'. I do agree with Steve on being responsible for oneself and those who depend on us. If anything in my view Government should be scaled down dramatically and with less power over the individual.